Let's say the average revenue per cigarette pack is $5, and there are 20 cigarettes in a pack. That works out to $0.25 revenue per cigarette. The Reynolds Tobaccoville plant is capable of producing $27.5 billion in revenue alone ($0.25 x 110 billion), for a labor cost of roughly 90 million (1,200 x $75,000).
1. http://www.nytimes.com/1987/08/23/business/what-s-new-in-tob... 2. http://www.journalnow.com/business/business_news/local/updat...
The biggest component in the price of tobacco appears to be sin taxes.
>Their data estimates that taxes make up 42.5% of the cost of a pack of cigarettes in the US, compared to 82.2% in the United Kingdom, which has the highest cigarette taxes.
https://en.wikipedia.org/wiki/Cigarette_taxes_in_the_United_...
Edit: Reply: Indonesia meanwhile...
China controls about 41% of the global market, but Asia Pacific market overall is 64%. That’s... a lot. Then there’s India... Africa...
Still it is true that China is the number 1 in the world in terms of both production and consumption.
You know, some people like cigarettes, despite the health effects. No one is "killing" you, if you decide to use a product even though you are aware of the risks.
I was expecting the rest of the comment to be an explanation of why this is so, but I feel that it really just restated, with specific numbers, the claim that they do indeed make a large amount of money (or at least revenue) per employee.
It's like someone listing as revenue Boeing jet sales when they only get $1000 for each sale.
The methods of calculating that 400,000 number are highly suspect.
Nearly 60 percent of the deaths occur at age 70 or above; nearly 45 percent at age 75 or above; and almost 17 percent at the grand old age of 85 or above! Nevertheless, without the slightest embarrassment, the public health community persists in characterizing those deaths as “premature.”
tobacco-related deaths occur at an average age of roughly 72, an age at which mortality is not unusual among smokers and non-smokers alike.
https://www.cato.org/publications/commentary/blowing-smoke-a...
I'm not disagreeing that they are harmful, but 400,000 deaths a year is hyperbole. Governments make a lot of money on that hyperbole too.
In Fiscal Year 2010, the federal excise tax on cigarettes (currently $1.01 per pack) brought in $15.5 billion in revenue.
In 2009, states raked in more than $24 billion by taxing cigarettes and $8.8 billion in settlement payments from tobacco companies
http://dailycaller.com/2011/02/28/what-would-an-america-with...
Oil, Gas, & Consumable fuels - average of $421k per employee
I think top 5 public software companies (GOOG, MSFT, FB, AMZN, AAPL) averages more than Tabacco.
GOOG: $256K per employee
MSFT: $186K per employee
FB : $659K per employee
AMZN: $6K per employee
AAPL: $402K per employee
Also, any story I could string together would definitely be speculative, so just stuck to the few facts I know for purposes of article. Will speculate here, however :) -- I'm going to guess primary driver is efficient manufacturing coupled with simple product offering. (e.g. this isn't some Tech company employing X% of it's workforce for R&D purposes)
I'm almost certain that Marlboro would sell you a gazillion packs for around $1 each on the black market---complete with e Vegas trip and hookers--if they could. Smuggling, to avoid taxes, was a huge business a while back when getting away with it was much easier.
Taxes and advertising cost a lot.
Without the combustion and rads is nicotine interesting on it's own?
